The column I wrote last week about the gold content of the Krugerrand versus
the Austrian Philharmonic was, it seems, a mistake, and I am really
embarrassed. For some reason, I always remember that the Krugerrand (a coin
that is 91% gold) always sold for less money than pure-gold coins like the
Austrian Philharmonic, and so I was surprised to see that they are now selling
at the same price, leading to an incorrect conclusion and a stupid column.
As it turns out, enough Junior Mogambo Rangers (JMRs) and other sneering
know-it-alls noticed the mistake and wrote to say things like, "Dear Mogambo,
You really have your head up your Fat Mogambo Butt (FMB) about the Krugerrand
versus a one-ounce pure-gold coin because the Krugerrand also contains one
ounce of pure gold, but it just has all that other copper and crap added to it,
resulting in the Krugerrand weighing more than one
Troy ounce, which you would have known if you had just Googled it up or done
any work at all for a lousy 30 seconds, but noOOOoooo! You think you are too
busy, and that you are too smart, and you think you know everything because
your memory is so good and you think you can get away with murder because you
are such a Hot Mogambo Stud (HMS) that even Hollywood itself seems tarnished
next to your sexy radiance, but it turns out you know nothing! And now you are
revealed as an idiot and an ugly, repellent little troll that nobody likes,
just like everybody says! (Signed) Fed up with your Stupid Mogambo Crap (SMC)."
Well, as nice as it was to hear from my sister like that, I am nevertheless
reluctant to accept any blame for myself, and I easily write it off as another
drug-related incident, as I take both Plavix and aspirin, a combination which
"may cause confusion" even when NOT mixed with alcoholic beverages consumed in
excess of what appear to be arbitrary and negotiable guidelines.
Alternatively, I can also blame it on my advancing age, as I don't seem to
remember things quite as well, and I don't remember some things at all,
although I can't remember what they were, so maybe I never forgot anything at
all, and maybe the Krugerrand used to be priced below the price of a pure gold
coin, but then the Krugerrand people said to themselves, "Hey! Nobody wants to
buy our stupid Krugerrands because they don't have as much gold per cubic
centimeter, plus they tarnish and look like hell!" and so they changed the coin
to a full ounce of pure gold, threw in the impurities, and then everybody
ganged up and said, "Let's not tell The Mogambo! And let's sabotage his lawn
mower so he has to get a new one!"
The fact that this is exactly what happened to my lawn mower proves, as far as
I am concerned, that I was right! I was tricked!
And even though it appears, and I readily admit, that I don't know my head from
a hole in the ground as pertains to types of gold, I am on solid, solid ground
when I say that gold, silver and oil will rise in price as the dollar falls in
purchasing power due to the vast expansions of the money supply, which is,
itself, just a measure of the debt created in a fiat currency (since new
dollars come from new debt these days), and which is doomed to fall, fall, fall
in value.
I admit that I only know this awful fact to be true 100% of the time for the
past million years or so, and I actually admit that I do not know about the
modern, present state of economics and economists, who think themselves capable
of responsibly managing a fiat currency, and when I sneer in disrespect at such
a notion, I know that I am on thin ground or shaky ice.
Fortunately, I have Ross Hanson at Northwest Territorial Mint, who notes that
"the median lifespan of the 176 global currencies currently in circulation is
39 years," which means that while the dollar is over 100 years old, a lot of
fiat currencies have come and gone if the average age of the average fiat
currency is only 39 years!
Mr Hanson says, "If you truly want to create wealth for yourself, know that
precious metals have no lifespan or any other kind of expiration date - they
are timeless and enduring," which is comforting to know after Junior Mogambo
Ranger (JMR) GPB sent the link to an Italian site, which is surprisingly in
English, which is surprisingly about Asia, which is, of course, AsiaNews.it.
The excitement was not from its headline, "US government securities seized from
Japanese nationals, not clear whether real or fake," which is not all that
exciting.
It was not until you read further and find that there is a subhead, that reads,
"Bonds worth US$134.5 billion are seized. This is the largest financial
smuggling case in history. But are they real? Concern over 'funny money' or
counterfeit securities is spreading in Asia."
The article notes that this is "mind-boggling" to a lot of people, probably a
lot of people like me, to know that that if they are fake, "the quality of the
counterfeit work is such that the fake bonds are undistinguishable from the
real ones." Yow! Indistinguishable! Detection-proof counterfeiting!
Anyway, without revealing how I can get myself a little taste of this
successful and obviously very lucrative counterfeiting, which is bound to be a
nice cottage industry ("Work from home only minutes a week to make billions of
dollars a day!"), they go on to report that Italy's financial police seized the
$134.5 billion in US bonds from two Japanese nationals at a border town between
Italy and Switzerland.
The haul included "249 US Federal Reserve bonds worth US$500 million each, plus
ten Kennedy bonds and other US government securities worth a billion dollar
each", which is "What caught the policemen's attention" since bonds with a face
value of a billion dollars are very rare, and "Such a large denomination is not
available in regular financial and banking markets. Only states handle such
amounts of money."
Of course, my immediate instinct is to compare this counterfeit operation with
the ordinary operation of the Federal Reserve, which regularly creates
counterfeit dollars from not only computer blips, but paper and ink, too, all
of which is money that is just as fake and counterfeit as the stuff these two
Japanese guys had!
And to make it even weirder, today's fiat dollar is NOT indistinguishable from
real money, which has the words "gold certificate" or "silver certificate"
right on the face of it, as opposed to today's money emblazoned with the
meaningless "Federal Reserve Note".
Don't think so? Hahaha! Then you have forgotten that for something to be money,
it must (among other qualities) also be a store of value, and the dollar is
anything but that! Hahaha!
Store of value? The dollar? Hahaha! Hell, the dollar has lost 96% of its buying
power since the Fed took control in 1913!
On the other hand, gold is the one thing that IS a "store of value", which is
why people who invested in gold are far, far ahead of those morons who invested
in anything else over the long-term.
That is why I am so happy, as in, "Whee! This investing stuff is easy!"
Richard Daughty is general partner and COO for Smith Consultant Group,
serving the financial and medical communities, and the editor of The Mogambo
Guru economic newsletter - an avocational exercise to heap disrespect on those
who desperately deserve it.
(Republished with permission from
The Daily Reckoning. Copyright 2009, The Daily Reckoning.)
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Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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